April 18 - In the USA, many have welcomed President Trump's announcement last Friday naming former Congressmen Scott Garrett and Spencer Bachus as nominees to the Export-Import Bank (Ex-Im) board of directors.
The Aerospace Industries Association (AIA) said: "This is a crucial next step to restoring a quorum on the bank's board so it can approve transactions larger than USD10 million and restore American export competitiveness in the global marketplace." But others have questioned how firm Trump's support is for Ex-Im given that he regularly criticised the bank during his election campaign and promised to close it.
Some members of Congress pointed out that Garrett has been one of the most vocal critics of Ex-Im and asked whether he is the right choice to be nominated as Ex-Im's president.
Once a non-controversial US government agency that financed export credit loans, Ex-Im took centre stage in 2015, with many politicians criticising it as a vehicle for crony capitalism. Ex-Im's authorisation expired altogether for more than five months in 2015 before Congress restored its authority through to 2019 in December 2015.
However, the Ex-Im Bank has been only partially operational since then because it lacks the requisite number of board members to authorise transactions of more than USD10 million.
If Garrett and Bachus are confirmed to the board, Ex-Im will be restored to full power. The AIA added: "The bank currently has a backlog of 40 deals worth more than USD30 billion that it cannot process." It claimed: "Ex-Im Bank support is available to all American exporters when the private sector does not have the capacity to provide financing. It doesn't provide an advantage to our companies - rather it offsets the advantage that our foreign competitors have with export financing from 60 foreign government-backed export credit agencies." So, a victory for American manufacturers like Boeing and General Electric which have overseas customers that use the agency's government-backed loans to purchase their products, as well as the companies that provide the logistics services to deliver those products.